6 Good Metrics

Jul 7, 2008

Recruiting metrics require a number of characteristics to be considered effective and reliable:

• Metrics must be predictive and actionable. Statistics need to provide information that can be acted upon by providing data to indicate trends.
• Metrics must be tracked over time in order to generate internal benchmarks and analyze internal performance.
• Recruitment metrics should include both quantitative and qualitative aspects. Time and cost obviously comprise the quantitative aspects of recruitment metrics, while productivity, retention, efficiency, and candidate performance comprise the qualitative aspects.

Metrics of the Past

Ten years ago recruiting was often seen as a steppingstone to an HR generalist role. Recruiters were trained to “screen out” applicants, thus making their positions transactionally focused. This led to the two most commonly used metrics: cost-per-hire and time-to-fill.

Cost-per-hire, the most common measurement applied to recruiting, only looks at the initial cost — and not the long-term cost — associated with hiring the wrong candidate. Focusing purely on initial cost will drive recruiters to place a ‘butt in a seat’ without regard to the quality of hire or the long-term production the candidate will or will not deliver.

Time-to-fill measurements are often popular due to the cost associated with positions remaining unfilled. Although this cost can be significant, this metric does not take into consideration the long-term cost associated with greater turnover percentages and additional recruitment costs for hiring the wrong candidates. Recruiters will focus on candidates considered the ‘lowest hanging fruit’ in order to fill positions faster.

Metrics of Today

As I speak with staffing and talent acquisition executives from around the country, they all express frustration in creating a measurable that drives one main objective — getting the right candidate for the job. In order to achieve this objective, we must first look at how the recruiter of today differs from the traditional recruiter of the past. Once we have the right recruiter, we can then focus on defining metrics that drive the right behaviors.

The recruiter of today has to move from being transactionally driven to relationship-driven. Recruiters are now sales professionals responsible for prospecting, building relationships, and advancing the sale. This function change requires the metrics associated with success of today’s recruiter to change as well.

Although the following is not an all-inclusive list, the following six metrics are examples of metrics that drive the right results and create the necessary behaviors needed to achieve these results.

• Performance/Quality of Hire: Data is driven by performance appraisal ratings and/or production 6 to 12 months into the new employee’s job as compared to their peers. Quality should be the first and most important recruiting metric. Since there is no formula for determining quality, recruiters and the hiring managers should define the standards for quality before recruiting. Quality of hire can be assessed through a simple survey that lists each criterion separately and asks the manager how the employee meets each standard on a scale of 1 to 5. New hire quality can also be tracked through formal performance evaluations, production reports, etc. A survey reported in’s Recruitment Metrics and Performance Benchmark Report found that the more regularly recruiting professionals measure new hire quality in an organization, the more satisfied hiring managers are with new hire quality.

• Manager Satisfaction: Data is driven by the percentage of managers who are satisfied with the hiring process and the candidates. This metric provides important, easily tracked data to determine a hiring manager’s preferences before recruiting begins, and then to evaluate staffing performance post-hire. Effective recruiting organizations rely on customer feedback to be successful. However, customer satisfaction should never be viewed as a stand-alone metric because it can be misleading.

• Source of Hire: Data is driven by the percentage of new hires from each defined candidate source. Data is also driven by the percentage of hires per source, with highest on-the-job performance and tenure rates. Tracking source of data information allows management to better understand the quality of their sourcing Strategy. This metric also helps recruiting managers see sourcing channels in terms of outcomes, not just sheer numbers.

• Referral Rates: Data is driven by the percentage of hires from referrals generated by the recruiter. Referral programs are most commonly focused on generating referrals from the greater employee population. Referrals generated by recruiters directly soliciting them from prospective candidates and new employees will have a measurable and positive impact on the quality of hire (studies show referrals make better performing hires), cost-per-hire (little to no cost for these referrals), and time-to-fill ratios.

• Candidate Satisfaction: Data is driven by the percentage of new hires who are satisfied with the hiring process as judged by a candidate survey. Candidate satisfaction surveys drive recruiting organizations to have a greater focus on the quality of service provided to each candidate, which has a positive impact on the brand positioning/employment branding of the company. Additional candidate metrics may also be valuable from candidates who were not selected, and candidates who declined offers. These last two groups are often overlooked, but they can provide valuable information about your recruiting operations.

• Pipeline Development: Data is driven by the number of potential candidates the recruiter has developed relationships with for key strategic positions. Data is managed through an effective CRM system. Similiar to tracking pipeline development of sales professionals, measuring recruiter-developed candidate pipelines can have a dramatic improvement on time-to-fill (candidates are already in process for commonly needed positions), cost-per-hire (pipeline candidates have no additional cost associated with placing them), and quality of hire.

Companies can decrease their time to fill and decrease their cost per hire, but if they can increase their quality of hire and quality of service, the entire game changes. Better employees translate into higher performance, more revenue, and higher profits. By using the right metrics you will encourage recruiters to focus their behaviors on the causes and not the symptoms of recruitment success. The combination of having the right recruiter with the right measurements will lead each recruiter to focus on finding the right candidate

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